A group of global financial companies have completed the first cross-border, intraday repurchase agreement using tokenized UK government bonds on the Canton Network, a blockchain designed for institutions.
The transaction marks the first time that digital versions of government bonds, a $2 trillion market, have been used in an intraday repo across borders, according to a release shared with CoinDesk. It also includes the first currency trade where tokenized gilts were exchanged for tokenized deposits denominated in a currency other than sterling.
In a repo, one party sells a security and agrees to buy it back later, often the same day. Banks and trading firms use these deals to raise short-term cash. By placing both the cash and the bond on a shared blockchain, the group aims to move collateral in real time rather than waiting for traditional market hours.
Participants in the latest round include LSEG, Euroclear, DTCC, Tradeweb, Citadel Securities and Societe Generale, along with digital asset companies such as Archax and Cumberland DRW. TreasurySpring has embedded interest payments and risk terms directly into smart contracts linked to the transactions.
The maneuver fits into Canton’s larger ambition to make $300 trillion in global assets, such as government bonds, more useful as collateral by tokenizing them on a blockchain, Kelly Matheison, chief business development officer of Digital Assets, said in an interview with CoinDesk.
Digital Asset is the main development company behind the Canton Network and last year raised money from financial heavyweights such as Goldman Sachs, DRW, Citadel Securities, BNY and Nasdaq.
“There are approximately $300 trillion of high-quality liquid assets worldwide,” Matheison said. “Yet only about 10% to 11% of that – roughly $28 trillion – is used as collateral at any given time.”
The reason for that is timing. In traditional markets, companies must plan days in advance to move securities across borders, navigating settlement cycles, batch processing and market closing times.
“On a practical level, it limits the amount of high-quality liquid assets you can deploy at any time,” she said.
Using blockchain ledgers like Canton for these transactions allows counterparties to transfer ownership in real time and 24 hours a day, rather than waiting for batch settlement windows. This way, financial companies can use their balance sheets more efficiently and trade more, Mathieson said.